USDINR finds buyers at key support level
US Dollar/Indian Rupee (USDINR) Technical Analysis Report for Feb 20, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, USDINR finished Thursday at 71.8630 surging 2970 pips (0.42%) on high volume. This is the biggest single-day gain in over a month. The last time we've seen such an unusually strong single-day gain on February 14th, USDINR actually lost -0.34% on the following trading day. Today's close at 71.8630 marks the highest recorded closing price since January 7th.
Daily Candlestick Chart (USDINR as at Feb 20, 2020):
Thursday's trading range has been 4900 pips (0.68%), that's far above the last trading month's daily average range of 3431 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDINR.
After trading down to 71.5185 earlier during the day, the forex pair bounced off the key technical support level at 71.6035 (S1). The failure to close below the support could increase that levels importance as support going forward. Prices are trading close to the key technical resistance level at 72.0915 (R1).
Crossing above the upper Bollinger Band for the first time since January 7th, prices have shown unusually strong upward momentum in the short-term. This might either indicate a potential buying climax after which prices could head back down towards the mean of the Bollinger Bands at 71.3782 or signal the beginning of a strong momentum breakout leading to even higher prices.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
With prices trading close to this year's high at 72.2040, upside momentum might accelerate should the market be able to break out to new highs for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Higher Closes" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for USD/INR. Out of 148 times, USDINR closed lower 61.49% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after two trading days, showing a win rate of 59.46% with an average market move of -0.08%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are AUDUSD losing -0.96% and NZDUSD closing -0.81% lower. On the flipside the best performers have been USDJPY closing 0.67% higher and USDCAD gaining 0.3%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDMXN surging 1.45% and USDZAR closing 0.97% higher. The worst performers of the day have been AUDCHF tanking -0.94% and AUDHKD closing -0.86% lower. Read more